Equities and the Economy:

• Day started good. Ended bad.
• ADP data shows U.S. Labor market strong.

Boy did it look like it was going to be a very good day. The ADP Research Institute reported yesterday the private sector added 263,000 jobs last month which was not only 70 thousand above the consensus and 40-50 thousand greater than even the most optimistic estimates, it was the most number of jobs added in over 2 years. The biggest gains were in the construction, manufacturing and mining sectors of the economy. This was the 3rd consecutive month the data topped expectations. Obviously this report was very bullish and investors came out from everywhere taking the Dow up as much as 199 points higher in the morning. And then the Fed released the minutes of its March FOMC meeting. The minutes revealed that the Fed wants to start unwinding its massive $4.5 trillion balance sheet later this year. Unwinding the balance sheet would in effect be an interest rate hike. Additionally, the minutes showed the central bank was concerned the stock market may be overvalued. All this negativity spooked investors and selling came in and at day’s end the Dow was down 41 points at 20,648 and the S&P 500 closed 7 points lower at 2,353. After hitting an intraday record high the Nasdaq finished down 34 points at 5,864. Yesterday the Dow and S&P posted their biggest one-day reversal since February 2016. That’s not good technically and I guarantee you the technical traders took note. Tomorrow the Labor Department releases its closely watched Employment Situation Report for March.

After yesterday’s whip-saw everyone’s on the sidelines having meetings trying to figure out what yesterday’s price action means and the Dow is up 19 points. Chatter.

Oil

• Prices close very marginally higher.
• DOE crude and products report contravenes API report.

Oil prices ended little changed yesterday with WTI logging a 12¢ gain closing at $51.15 and Brent settling up 19¢ at $54.39. The DOE released its regular weekly crude and products report yesterday noting crude oil stockpiles rose 1.6 million barrels last week while gasoline and distillates (distillates are mostly diesel) fell by 620,000 bbls. and 540,000 bbls., respectively. Both data points were below expectations. In aggregate inventories rose 500,000 bbls. which was much different than Tuesday’s API report showing at huge 6.4 million drop in inventories. Remember, reporting to the API is voluntary. Reporting to the DOE is mandatory, therefore the DOE report carries more “weight.” Obviously the DOE report was bearish and it’s a credit to prices they didn’t fall. I think traders are focusing more on the longer term noting data earlier in the week showed global stockpiles are lower and we’re rapidly approaching the summer driving season when demand will be greater. Add OPEC’s comments of extending the production cut and traders are a little reluctant right now to play it from the short side. This morning WTI is up 32¢.

Courtesy of MDA Information Systems LLC

Natural Gas

• Prices little changed yesterday.
• Current prices at mid-winter levels.

Natural gas prices ended little changed from Tuesday with the May contract closing down 2.7¢ at $3.266/MMBtu. There was virtually no movement in calendar strip prices. That being said, current prices are at winter levels, i.e., February, driven by increasing demand and static production. The electric generation sector is always the swing market burning more gas when its abundant, and less, and losing market share to coal, when less so. A great lesson in elasticity and economic substitution. The coal/natural gas relationship should be in economic textbooks.

Today the EIA releases its weekly storage report with traders expecting a 10 Bcf injection which compares to last year’s 6 Bcf and the 5 year average of a withdrawal of 13 Bcf. This morning natty is up 1.1¢.

Elsewhere

This story just won’t die. I’m talking about the Tom Brady stolen jersey story. For all the untold hours and money poured into finding Tom Brady’s two Super Bowl jerseys by the authorities if not for a teenage New England Patriots fan the items may never have been recovered. It began when 19 year old Dylan Wagner had a strange online discussion with a fellow memorabilia collector last December. Wagner just sold Martin Mauricio Ortega a jersey on eBay after which the two exchanged photos of their collections. In Ortega’s photo was Brady’s Super Bowl XLIX jersey. Wagner asked him outright, “How did you get that?” Ortega responded that he’d tell him later. After that encounter it was reported that Brady’s Super Bowl LI jersey was stolen. It became a big story and Wagner immediately put two and two together. “I knew exactly who had it” Wagner told Boston’s WBZ-TV.

Wagner provided the authorities with photos of Ortega’s collection, including the missing Super Bowl XLIX jersey, and two addresses for him. Although there was the video of Ortega, a credentialed member of the international media, leaving the Patriots locker room shortly after Super Bowl LI, that alone could not prove Ortega stole the jersey. Per Boston ATF Special Agent Christopher Arone, “The video alone didn’t prove anything. Without the photos we wouldn’t have been able to get the search warrant to go into Ortega’s basement and get the jerseys.” But that’s not the end of the story. Brady’s jersey was “stolen” again! This time by Rob Gronkowski during the Boston Red Sox opening ceremonies at Fenway Park on Monday. http://www.businessinsider.com/rob-gronkowski-steals-tom-brady-super-bowl-jersey-red-sox-2017-4